While the technical regulations regarding the power units are going into their 4th stable year, Mercedes' engine Chief, Andy Cowell, has noted there are still gains to be made. Cowell underlined that the key to these continued improvements are Mercedes' proven testing facility.

I've read on a dutch website that the Merc PU will have 50 hp more at the beginning of the season in comparison to Ferrari and Renault and that their peak performance will reach 1000hp on track this season. The source of this claim is from an Italian website, I remember it to be Motorsport Italia

Mercedes has made .7 second improvements from the power unit alone year on year. The fact they need so much less fuel than everyone else is a huge advantage, even if they make no power gains they're still ahead. But you're right, I suspect hunting for those last 30 or 40hp is going to get difficult from here on in.

There's a theoretical 1,000hp that's possible, everyone is now at least within 92% of that figure.

The height of cultivation is really nothing special. It is merely simplicity; the ability to express the utmost with the minimum. Mr.Lee

I thought they said their Hypercar (with a year or two old engine spec) already makes 1000hp? And that is definitely detuned compared to the current F1 spec PU.
So I see no reason why they wouldn't have passed that 1000hp mark a long time ago already (with the F1 car spec PU)

I thought they said their Hypercar (with a year or two old engine spec) already makes 1000hp? And that is definitely detuned compared to the current F1 spec PU.
So I see no reason why they wouldn't have passed that 1000hp mark a long time ago already (with the F1 car spec PU)